Other areas

Question 1

State why Jim and Sandra should each consider arranging a Lasting Power of Attorney and explain briefly how these would be set up

Answer 1

• LPA ensures affairs can be managed efficiently/peace of mind/personal wishes known
• complete paperwork/signed/witnessed/dated
• property and financial affairs LPA
• health and welfare LPA
• register with the Office of Public Guardian (OPG)/pay fee to OPG to register
• must be arranged before they lose mental capacity
• appoint attorneys/each other
• choose replacement attorneys/appoint Anna in case both fall ill

Question 2

Identify the client specific factors that would typically influence Jim and Sandra’s attitude to investment risk

Answer 2

• timescale
• their good health/age
• disposable income/existing assets/adequate emergency fund
• guaranteed pension income for Jim
• State pension guaranteed for both from age 66
• Investment experience/knowledge
• Objectives/priorities/need for capital/income/growth
• Client thoughts on economic environment/market conditions
• Tolerance for loss/risk versus reward
• High capacity for loss
• No debt
• No inheritances expected

Question 3

What are the implications of Jim and Sandra owning their home as “tenants in common”?

Answer 3

• they each own an agreed proportion of the home - not always 50% each
• each of them could sell their share of the home without agreement of the other
• if one of them were to die their share would not automatically pass to the survivor
• the deceased’s share passes according to the Will - which does leave everything to each other
• they could choose to leave their share on first death to a trust
• the survivor would have lifetime use of the house
• upon death Anna/grandchildren inherit
• because share of property on first death is not owned by the survivor the local authority cannot use it for care fees
• survivor can move house with the permission of trustees (likely to be Anna)

Question 4

What are the advantages of Jim and Sandra working part time beyond normal retirement age?

Answer 4

• employer pension contributions
• earnings before state pension commences at age 66
• may be able to defer scheme pension from DB scheme/will need to check the scheme rules
• holiday pay/sick pay/employee benefits
• death in service